The cytoplasmic tyrosine kinase Src has been implicated in signal transduction induced by growth factors and integrins. Src also shows oncogenic activity when deregulated. Accumulating evidence indicates that the tyrosine kinase Abl is an important substrate for Src signalling in normal cells. Here we show that Abl is also required for Src-induced transformation of mouse fibroblasts. Abl does not mediate tyrosine phosphorylation of Stat3 and Shc, two important regulators of Src oncogenic activity. In contrast, Abl controls the activation of the small GTPase Rac for oncogenic signalling and active Rac partly rescued Src transformation in cells with inactive Abl. Moreover, Abl mediates Src-induced extracellular regulated kinase 5 (ERK5) activation to drive cell transformation. Finally, we find that Abl/Rac and Abl/ERK5 pathways also operate in human MCF7 and BT549 breast cancer cells, where neoplastic transformation depends on Src-like activities. Therefore, Abl is an important regulator of Src oncogenic activity both in mouse fibroblasts and in human cancer cells. Targeting these Abl-dependent signalling cascades may be of therapeutic value in breast cancers where Src-like function is important.